Seventy-foot spaceships and intergalactic tunnels now occupy a 40,000-square-foot space in Village at the West Oaks that once housed shelves brimming with bedding and home goods.
Gone is traditional big-box retailer Bed Bath and Beyond, and in its place has risen Seismique, a retailer designed to at once appeal to a younger audience more interested in experiences than accumulating things while at the same time breathing new life into an ailing mall.
Even before the pandemic trounced retail, big chains were casting big boxes aside as they shifter to e-commerce, shrinking their physical footprint and leaving giant holes in shopping centers across Houston and the country.
The retrenchment was accelerated by the pandemic, with retail occupancy falling 60 basis points in Houston to less than 94 percent over the course of the last year, according to NAI Partners, the first time it dipped below that level since 2014.
The decline hurt both retailers and investors. New real estate development also declined 25 percent, according to NAI. But turnover also offers an opportunity to reimagine traditional retail spaces.
And that is part of the appeal of experiential retailers such as Seismique. The expectation is that they will occupy large-store formats fewer traditional retailers will take while drawing crowds that spill into surrounding shops and boost a shopping center’s profile.
“What we’re finding is the big boxes are shrinking their footprint because they don’t need the floorspace. The problem for a landlord would be trying to split those boxes,” said Kirt Rimpela, of Wu Property Management, which operates 1.6 million square feet of retail across 14 shopping centers in greater Houston, including the one that now houses Seismique. “You have to find those alternative tenants, which is where Seismique comes in.”
An experiential retailer can lift a whole development, said Matt Raga, director of property programming and leasing for Rebees, a Dallas firm that works with the Dallas-based developer Lionstone. For the redevelopment of downtown Sugar Land they’re working on, Lionstone and Rebees are bringing special effects company Flight School into the old Z Gallerie after the big-box furniture retailer shuttered the store in 2019.
The augmented reality space aims to transport customers to a fantastical world where a lightkeeper hands them a lantern that can be used to collect light.
“The demand for this kind of content is just enormous,” Raga said. “We see this as a seeder…It’s just a great magnet it just pulls people in.”
As people do more of their day-to-day shopping online, retail centers built around big boxes have to be remade around experiences, he said, so consumers have a reason to leave home and engage with things they can see, feel, taste and touch.
“There’s 2 trillion square feet of retail in the U.S. and a lot of that was empty pre-COVID and a lot of it is going to be coming up empty,” Ragan said. “We think we’ve got a lot of opportunities over the next couple of years to take some retail and turn it into something special and unique.”
Jason Baker, whose Baker Katz owns 30 shopping centers, agreed.
“That’s one of the big pivots moving forward, is how you’re driving traffic to retail,” he said. “And I think experiential is at least part of the path forward.”
Shopping centers designed in the 1980s were built around big boxes where people came to check items off their shopping lists. David Glover, the new chief creative officer at developeter MetroNational and former executive director at Universal Studios now charged with reimagining Memorial City Mall’s more experience-based future, describes them as “houses of brands” all mashed together with little thought paid to any thread to tie them all together.
Conversely, he said, when you step into a place like Disneyland, you show up knowing “great things are going to happen to you.” He calls Disney a branded house, built upon programming, unified design and shared experiences that inspire people to get up and out of their chair and visit in person.
“That’s what we’re doing, is transforming Memorial City into a branded house,” Glover said.
The shift comes as companies such as Bed Bath and Beyond find that giant retail spaces have become a burden. At the same time, Seismique creator Steve Kopelman saw the space as a blank slate. And his creation scratches the itch of a generation more interested in experiences than it is things.
“The younger generation, they don’t strive to get a Rolex. They strive to see the sun rise at Machu Picchu,” he said. “I think we’ve given them that sunrise.”
Seismique has been selling out on weekends at its 30 percent capacity limit, Kopelman said, noting he’ll likely start allowing 50 percent of his roughly 1,200-person capacity inside this summer. He said he is confident he’ll recoup his more than $7 million capital investment within the company’s first two years.
“Even with COVID, we’ll do that,” he said last week.
Kopelman said he expects about 30 percent of his annual business will come from tourists, once travel resumes.
Wu Property Management, Seismique’s landlord, is fielding interest from other virtual reality and entertainment companies looking for space, Rimpela said.
“There’s going to be more of that happening. It’s just that those concepts are just now coming to fruition,” he said.
But consumers can be fickle, so this new type of retailer will have to work to hold their interest, said Venky Shankar, research director of Texas A&M University’s Center for Retailing Studies.
“Retail is always cyclical. people get fascinated with some concepts and then after a few years they want different ones,” he said. “It’s very hard to make any of them stick for any amount of time.”
Still, Kopelman expects his concept has staying power. it’s a big open box with a big free parking lot, and the way the space is designed guests can go one of four ways. There’s no one path to follow.
“They’re free to stay here as long as they want,” Kopelman said. “There is no wrong way.”
By Amanda Drane
Houston Chronicle
Archives
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- August 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- October 2019
- September 2019
- August 2019
- May 2019
- April 2019
- February 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- December 2014
- November 2014
- August 2014
- July 2014
- May 2014
- April 2014